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Standoff over sanctions deadlocks North Korea nuclear talks

BEIJING—Six-nation disarmament talks on North Korea appeared near breakdown in Beijing Thursday night as Pyongyang's negotiators refused to budge off the issue of U.S. financial sanctions on their country.

With only one day remaining in the nuclear talks, U.S. and Japanese envoys sounded pessimistic about the lack of progress.

"The situation is extremely difficult, and there is no prospect for a breakthrough," Japanese chief delegate Kenichiro Sasae said.

Christopher Hill, the senior U.S. envoy, said North Korean delegates expressed no interest in studying various proposals on how to exchange nuclear disarmament for assistance.

"I would like to see them engage a little more in what we were talking about," the assistant secretary of state said. "We've all done a lot of work in the last few weeks. We'd like to see the (North Korean) delegation match that amount of work and show that they're looking at the proposals."

But Hill said the North Korean delegates wanted to focus only on issues surrounding Banco Delta Asia (BDA), a Macau bank that the U.S. Treasury Department 14 months ago fingered as a money laundering and bogus currency conduit for North Korea. The U.S. sanctions have pinched North Korea's ability to make global transactions.

"The North Koreans had a great deal of difficulty talking about anything but BDA," Hill said, adding that Pyongyang's envoys said that their hands were tied.

"They have had strict instructions from their capital that they cannot engage officially on the subject of the six-party talks until they have the BDA issue resolved. And I've made very clear I'm not a BDA negotiator," Hill said.

China has hosted the nuclear disarmament talks since 2003, pulling in the two Koreas, Japan, Russia and the United States. North Korea last year began a 13-month boycott of the talks over the U.S. sanctions, agreeing to return only after its Oct. 9 nuclear test and when Washington said it would discuss the financial sanctions on the sidelines.

Diplomats at the talks commonly must follow instructions from their various capitals on what concessions to make and what stance to assume.

The talks, which began Monday, are scheduled to end Friday. Hill said he was planning to return to the United States on Saturday.

"It's hard to think about being optimistic right now. But I emphasize: We're on Thursday. We do have another day," Hill said.

Hill said the talks would succeed only with verifiable agreements on the ground.

"We are not prepared for a situation where, you know, somehow we pretend that they're doing something, they pretend to disarm and we pretend to believe them," he said.

A special U.S. team led by a Treasury Department official spent lengthy sessions Tuesday and Wednesday in Beijing discussing the financial sanctions with counterparts from North Korea but achieved no breakthrough. The bilateral working groups agreed to meet again next month in New York City.

China, meanwhile, showed a little testiness at suggestions that it may be partly to blame if the talks break down. China is North Korea's only real ally, providing it with three-quarters of the energy it needs to survive. China has declined to lean heavily on the North even as it lambasted the "brazen" nuclear test that jolted Northeast Asia.

"If only China is held to account for any progress to be made, that is not objective, (and is) unfair and unrealistic," Foreign Ministry spokesman Qin Gang said.

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(c) 2006, McClatchy-Tribune Information Services.

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